Potential Pitfalls in “Uberizing” Your Workforce

While the U.S. Department of Labor and state agencies often take a hardline approach to independent contractor misclassification, the United States is arguably more accepting of alternatives to the employee/employer model than other countries.

In Argentina, the default relationship is that of employee and employer, and bona fide independent contractors are limited to professionals and very specific cases. In Brazil, the employer-employee relationship is the default agreement, and it’s difficult for workers and companies to choose a different legal regimen. In Mexico, an employment relationship is one in which the worker and no one else will provide the work, the worker is under the employer’s control and work is in exchange for wages.

In France, the concept of subordination defines the employment relationship, meaning that the employer gives orders to employees, controls the execution of the orders, and may discipline employees. In Germany, the most important distinction between employees and independent contractors is the degree of independence the worker exercises over the work. In the UK, an increasing number of people take part in the on-demand economy. Individuals at work are defined as “self-employed,” “employees” and “workers,” but there is no legal test to determine employment status.

Employers in all countries need to be be cautious about classifying workers as independent contractors. In the United States, unless the legal framework changes, it will be increasingly difficult to fit workers into the employee/independent contractor dichotomy.